Monday, March 3, 2014

Today's links

1---Arms, 400 kilos of explosives seized from Kiev radicals on Crimean border, RT

2---The Biggest Component Of CPI - Rent - Is Now The Highest Since 2008: What Does This Mean For Broad Inflation, zero hedge

3---Corporate takeover of Europe, Testosterone Pit

Shaping Events in Europe
In recent years Berggruen has carved out an influential role in European politics, principally through his creation of the Council for the Future of Europe (CFR), a think tank whose membership list reads like a veritable Who’s Who of transatlantic politics, business and finance.

Members include Tony Blair (for whom obviously no introduction is needed); Jacques Delors, a former president of the European Commission; Mohamed Al Erian, the former CEO of global investment management firm PIMCO; Pascal Lamy, a one-time director general of the World Trade Organization; Romani Prodi, former Italian prime minister and 10th president of the European Commission; Gerard Schroeder, a former chancellor of Germany and current global manager for Rothschild investment bank; Peter Sutherland, a former attorney general of Ireland and long-standing chairman of Goldman Sachs International; and Axel Weber, a former president of the Deutsche Bundesbank and now chairman of the board of Swiss megabank UBS.

A more impressive group of luminaries you’d be hard pressed to find anywhere in the world, with the obvious exception of the CFR itself. To lead them in their noble cause, Berggruen appointed none other than Mario “Three Card” Monti, Goldman Sachs’ former representative in Europe who all but admitted in a recent television interview that his nomination to replace Berlusconi as Italian prime-minister in 2011 amounted to a presidentially-blessed government coup — one whose execution, as Zero Hedge reports, stretched far beyond any constitutional powers awarded to the president and which involved numerous foreign and financial interests and conflicts thereof.

So, now that a clear picture is forming of the caliber of personnel behind the Council for the Future of Europe, what about its agenda? To that end, we must turn to an article Berggruen recently co-wrote with Nathan Gardels for the CFR’s flagship publication Foreign Affairs:
The key to creating a federal Europe with legitimate governing institutions is appropriate implementation of the principle that Europeans already know as “subsidiarity,” with higher levels of government taking on only those functions and responsibilities that cannot be fulfilled at a lower level. The Berggruen Institute on Governance’s Council for the Future of Europe has sought to address these issues by gathering a small group of Europe’s most eminent and experienced political figures to debate and design the institutions that would govern a federal Europe and then plot a path forward, step by step.

4---Kerry Threatens "asset freezes,  tumble of the ruble.”, RT

He is not going to have a Sochi G8, he may not even remain in the G8 if this continues,” Kerry said. “He may find himself with asset freezes, on Russian business, American business may pull back, there may be a further tumble of the ruble.”

Not bothering to make any effort to understand the complex processes occurring within Ukrainian society or make an objective assessment of the environment, which is furthering the degradation following the forceful seizure of power in Kiev by radical extremists, [Secretary of State John Kerry] operates with a ‘Cold War’ stamp, offering not to punish those who carried out the government overthrow, but the Russian Federation,” the statement said.

"And while glossing over this, the USA and its allies have closed their eyes to the excesses of the radical fighters on Maidan, their bullying of political opponents and ordinary citizens, as well as their anti-Semitism and militant Russophobia.” 

5---Mess in the West: Home Sales Index Hits 7-Year Low , wsj

6---Residential construction weakness - looking beyond the cold weather, sober look
Recently we've had a visible slowdown in housing starts in the US, which has largely been attributed to the weather (see chart).
USA Today: - Housing starts fell sharply in January for the second straight month as cold and stormy weather continued to batter the recovering housing market.

Starts of single-family houses and apartments fell 16% to a seasonally adjusted annual rate of 880,000 last month after declining dramatically in December, the Commerce Department said Wednesday. Extreme winter weather is largely blamed for both poor showings after starts jumped to their highest level in a year in November.

7---International banks under pressure , sober look

Bloomberg: - The paper is the first to raise the possibility that the five banks overseeing the century-old rate -- Barclays Plc, Deutsche Bank AG, Bank of Nova Scotia, HSBC Holdings Plc and Societe Generale SA -- may have been actively working together to manipulate the benchmark. It also adds to pressure on the firms to overhaul the way the rate is calculated. Authorities around the world, already investigating the manipulation of benchmarks from interest rates to foreign exchange, are examining the $20 trillion gold market for signs of wrongdoing.

8---Two myths about the Ukrainian conflict, sober look
Myth # 1: Those who believe that Putin's actions with respect to Ukraine could hurt Russia economically should think again. Global tensions have generally been good for Russia and the current situation is no exception. Russia is not afraid of US administration's sanctions threats. More dollars are about to start flowing to Putin and his friends

9---Mortgage delinquencies much higher than reported, squatters rejoice, oc housing

I recently wrote about investors buying non-performing loans to foreclose and obtain rental properties. One of the questions this practice raises is why lenders are bundling and selling these loans to investors at steep discounts. Is it because they fear the bad press from foreclosure? Is it because they need the cash? There is one potential answer I failed to consider: banks may be selling non-performing loans to improve their reported delinquency rates, thus improving their capital ratios

In RealtyTrac‘s Foreclosure News Report, Daren Blomquist noted

… hundreds of thousands of NPLs that have been sold in the last three years, creating a ghost inventory of distressed loans owned by corporations that many have never heard of and that don’t report their delinquent loans to a trade organization such as the Mortgage Bankers Association or any government agency....

JPMorgan Said to Offer Bad Debt as BlackRock Plans HSBC Sale (1)
By Heather Perlberg and Alexis Leondis February 07, 2014...

“Banks have made a decision internally that a delinquent borrower is not a core customer,”Ashish Pandey, chief executive officer of Altisource Residential Corp., said at a conference in Las Vegas last month. Pandey, whose firm had 6,300 delinquent loans as of the third quarter of 2013, said he expects as many as 500,000 non-performing loans to sell in 2014.
The total number of reported delinquent mortgages in the United States numbers about 4,500,000 according to LPS. If 500,000 of those are sold to firms that no longer report them as delinquent — even though they are — the delinquency rate would drop about 11% just based on the sale of non-performing loans

10---Completed Foreclosures up 11.8%, DS News

Foreclosure inventory in January was down by one-third over the year, although completed foreclosures ticked up over the month, according to CoreLogic’s National Foreclosure Report released Thursday.
Demonstrating an 11.8 percent increase over the month, completed foreclosures totaled 48,000 in January. However, despite the monthly increase, foreclosures were down 19 percent over the year. January’s total remains elevated compared to a historical norm of 21,000 foreclosures per month by CoreLogic’s standard.

Having declined for 27 consecutive months, the foreclosure inventory stands at 794,000, a 33 percent drop from 1.2 million last January, according to CoreLogic. About 2 percent of all mortgaged homes were part of the foreclosure inventory in January, according to CoreLogic’s data, while Black Knight Financial Services reported the rate at 2.37 percent in its foreclosure inventory report released the same day as CoreLogic’s.
“We expect to see continued progress in the months ahead, but the judicial foreclosure states will continue to lag the rest of the country in working down their backlogs of foreclosed properties,” said Anand Nallathambi, president and CEO of CoreLogic.

11---US-backed Ukrainian regime mobilizes reserves, threatening war with Russia, wsws

Russia’s intervention in Ukraine is the inevitable outcome of the reckless decision by Washington and the European Union (EU) to back a fascist putsch in Kiev. The Kiev regime came to power on a program of strategically orienting to the West and imposing deep austerity measures on the working class, including pension cuts and massive energy price increases, a strategy so unpopular that Prime Minister Arseniy Yatsenyuk compared himself to a “political kamikaze.”...Alex Lantier

Putin brushed aside Obama’s demands, calling the Ukraine situation “extraordinary.” He pointed out that far-right elements backed by Kiev and the Western powers threaten “the lives and health of Russian citizens and their many compatriots” in Ukraine.
Moscow may intervene not only in Crimea, but also in other majority-Russian-speaking areas of Ukraine hostile to the right-wing regime in Kiev. The Kremlin issued a statement that declared: “In the case of any further spread of violence to Eastern Ukraine and Crimea, Russia retains the right to protect its interests and the Russian-speaking population of those areas.”

Russian troops, Cossacks, pro-Russian local inhabitants, and Putin’s “Night Wolves” biker gang are reportedly working together to fortify the land bridge between Crimea and the rest of Ukraine and hold it against potential offensives by the Ukrainian military.

Russian officials bluntly dismissed US criticisms as hypocritical, noting that Washington has violated countries’ sovereignty by invading countries like Iraq and Afghanistan. Russian Foreign Ministry sources responded to US National Security Adviser Susan Rice’s comment that Russia was committing a “grave mistake” in sending troops to Ukraine by advising the United States itself not to use force

12---The Crisis in Ukraine----Contagion Alert: Radical, "scorched earth" Capitalism spreads East, wsws

There is no question but that Russia is confronted with an existential threat. The integration of Ukraine into the expanding anti-Moscow alliance would render Russia more vulnerable to imperialist aggression and destabilization. Future operations will unfold not only on the periphery of Russia, but within its borders. The United States and the European imperialist powers will have no difficulty finding new “human rights” causes to encourage, finance and arm....

Kerry, who voted in 2002 to authorize President George W. Bush to invade Iraq on the basis of lies about Iraqi weapons of mass destruction, declared, “You just don't in the 21st century behave in 19th century fashion by invading another country on [a] completely trumped up pretext.” The fact that such statements can be made without any challenge from the “mainstream” media only underscores the complete integration of the corporate-controlled media with the American intelligence and military apparatus and its role as a purveyor of state propaganda.

But the record of Washington speaks for itself. Just over the past 25 years, the United States has invaded, bombed or overthrown governments in Panama, Grenada, Somalia, Haiti, Sudan, Serbia, Afghanistan, Pakistan, Iraq, Yemen and Libya. It has carried out assassinations and cyber attacks against Iran and is intervening massively to overthrow the government of Syria.

The United States does not accept any nation’s right to sovereignty or territorial integrity. Once a country runs afoul of the predatory interests of US imperialism around the world, it is targeted for attack and regime-change.

Nor is there the slightest democratic content to the fascist-dominated protest movement in Kiev and western Ukraine. The extreme nationalist forces dominating these protests trace their political lineage back to the Ukrainian fascists who allied themselves with the Nazi invaders in World War II, who murdered millions of Ukrainians. The predecessors of Svoboda and the Right Sector aided in the annihilation of the country’s Jewish population. Since the installation of the new far-right government, reports have proliferated of fascist attacks on Jews in Kiev.

Washington and Berlin, in utilizing these forces to install a puppet regime and gain effective control over Ukraine, are stoking an explosion of tensions between various ethnic and religious groups that threatens to dwarf the bloodbath that accompanied the breakup of Yugoslavia in the 1990s, which was likewise instigated with US and German support.

The principal responsibility for the escalation of the crisis in Ukraine rests with the United States and Germany. Both countries, along with their European Union allies, systematically intervened to channel popular dissatisfaction with the corrupt regime of President Viktor Yanukovych behind ultra-right nationalist and fascist forces. Their aim all along was to topple the elected government and install a regime aligned with Western imperialism and willing to participate in its well-advanced plans for the geopolitical isolation and carve-up of Russia...

The coup in Ukraine represents a major milestone in this campaign. Effective US control of Ukraine opens up the possibility of US or US-linked troops being stationed directly on Russia’s western border. It threatens Russia’s Black Sea fleet in Crimea, which is Moscow’s only water route into the Eastern Mediterranean, the Balkans and the Middle East. It will be used as well to push Georgia into NATO and fuel separatist and secessionist agitation by a wide variety of ethnic and religious minorities within Russia...

It is worth recalling Trotsky’s warnings that the dissolution of the Soviet Union would result in Russia’s descent to a semi-colonial status. Trotsky in the 1930s, under conditions of the Stalinist regime and its reign of terror against all socialist elements in the country, raised the slogan of an independent Soviet Ukraine, insisting that independence on a bourgeois basis could have only the most reactionary implications. A bourgeois Ukraine, moreover, could be nothing other than a plaything of the various imperialist powers. So it was then, so it remains today....

It is worth recalling Trotsky’s warnings that the dissolution of the Soviet Union would result in Russia’s descent to a semi-colonial status. Trotsky in the 1930s, under conditions of the Stalinist regime and its reign of terror against all socialist elements in the country, raised the slogan of an independent Soviet Ukraine, insisting that independence on a bourgeois basis could have only the most reactionary implications. A bourgeois Ukraine, moreover, could be nothing other than a plaything of the various imperialist powers. So it was then, so it remains today.

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